For working capital or term loan transactions, an insured lender is making a loan to a business looking to expand or enhance its operation. These loans are typically secured by all assets of the business, but usually focus on accounts, inventory, equipment and the general intangibles of the company.

Given the stringency of underwriting requirements and the difficulty in obtaining credit, obtaining a UCC insurance policy — and shifting the loan’s documentary and perfection risk to the title company — will make the granting of such a loan by the lender much easier and more likely.

About the Author

Andrew D. Lundberg is Vice President and Senior Underwriting Attorney for UCCPlus, a division of Fidelity National Title Group.